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City of Cape Town needs to focus on customer-centric solutions to mitigate water crisis

While the City of Cape Town has focused much of its effort to alleviate the water crisis on supply-side fixes like desalination and tapping underground aquifers, more effort needs to be put into demand-side solutions that incentivise customers to reduce water use, according to Blue Horizon energy specialist Chris Ahlfeldt.

“Awareness campaigns asking people to use only 87 ℓ a day are a start, but do little to help customers prioritise the efficiency upgrades, let alone provide a financial incentive for customers to do so,” he says, adding that the lack of sub-metering infrastructure on many large apartments, and fluctuating seasonal occupancy, result in meaningless targets for many customers.

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“Likewise, publicly shaming customers for high water use and forcibly restricting water supply to these customers may raise awareness through headlines but ultimately damages customer relationships and does little to solve the wide-scale problem,” he says.

Ahlfeldt stresses that customers should feel that the city is working with them, not against them.

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“Fortunately, programmes piloted by other cities globally have demonstrated the effectiveness of financial incentives to install efficiency equipment,” he notes.

Ahlfeldt points out that a programme called Pay-As-You-Save (PAYS) has had a high success rate by leveraging an inclusive financing approach, so customers pay nothing upfront for efficiency investments.

He explains that, under the PAYS programme, the upgrade would be financed through a third-party capital provider, ideally one with access to low interest development finance and the ability to recover costs through monthly municipal bills to the customer.

“Efficiency upgrades must meet minimum savings standards, so customers actually pay less after the upgrade than before as the savings exceed the tariff cost recovery charge.”

Since the efficiency investment is tied to the meter, PAYS does not require home ownership to participate, enabling renters to also benefit from the programme.

Cape Town is already rolling-out a new “drought tariff” on customer bills, so opportunity exists to use funds from this tariff to invest in customer efficiency, adds Ahlfeldt, who believes that customers would likely be more receptive to the tariff if they know they will directly benefit from the funds.

“While Cape Town has its hands full warding off the looming “Day Zero”, hopefully it will also consider some customer-focused and inclusive solutions like PAYS that work with customers to incentivise water savings,” he said.